Korea Gas shows interest in Malampaya

Korea Gas Corp. (Kogas), a state-owned gas development firm of Korea, has expressed keen interest to undertake the oil rim project in the $4.5-billion Malampaya deep water gas-to- power project in Palawan.

Korean Minister of Commerce, Industry and Energy (MOCIE) Hee-Beom Lee said Kogas is now talking with the state-run Philippine National Oil Co. (PNOC) for a possible joint venture.

Lee said this potential oil exploration business tie-up with PNOC could be one of the offshoots of a memorandum of understanding (MOU) signed between the two nations as part of the recent state visit of Korean President Roh Moo-Hyun to the Philippines.

"Korean firms are looking into the Philippine natural gas industry; and the Malampaya oil rim is one of those discussed, especially for Kogas and PNOC," Lee said.

The MOU will also initially allow the two countries to share information on how to develop the gas industry in the Philippines.

For his part, Energy Secretary Raphael P.M. Lotilla said the two governments will initially discuss the parameters in the development of Malampaya oil rim development project before an actual joint venture between Kogas and PNOC will be formed.

The Department of Energy (DOE) is asking Malacañang to issue an Executive Order that will give an authority to PNOC to look for another partners to develop the oilfield beneath the Malampaya natural gas project.

The Malampaya consortium composed of Shell Petroleum Exploration B.V.; Chevron Texaco and PNOC-EC, has decided not to pursue the oil rim project in the Service Contract 38 or Malampaya gas development project.

Aside from possible upstream development, Lee said they are also interested to invest in the development of country’s downstream natural gas industry, renewable energy sources and coal mining.

Kogas took part in the bidding for the engineering design of PNOC-EC’s $80 million Batangas to Manila natural gas pipeline project. Kogas owns one of the largest liquefied natural gas (LNG) terminals in the world with a storage capacity of over 2.24 million cubic meters.

Malacañang has been pushing for the development of the downstream natural gas industry to help in the government’s overall effort to reduce the country’s dependence to imported fuel oil.